Exchange derivatives trading climbed in first quarter

Activity rose 1.4% year-over-year

The number of derivatives traded on exchanges rose in the first quarter as continuing political and economic risks drove traders into the market, according to data provided by the members of the World Federation of Exchanges.

Trading of exchange-traded derivatives globally increased 1.4 percent to 4.95 billion in the first quarter of 2013 from 4.88 billion in the comparable period last year, Romain Devai, WFE’s research and projects manager, said in an interview at IOMA, the World Federation of Exchanges’ derivatives conference, in Busan, South Korea.

Excluding trading in the benchmark Kospi Index options, which fell after the size of the contracts was multiplied by five, trading rose 13.6 percent to 4.80 billion in the quarter from 4.22 billion in the first quarter of 2012.

“Uncertainty continues, which means there’s a greater need for hedging,” Devai said in an interview. “Also we have begun to see a return in volumes on the underlying cash markets which usually aids derivatives volumes.”

NYSE Euronext said last week that net revenue from derivatives increased 14 percent to $201 million in the quarter as volume rose. Equity-trading revenue, excluding regulatory fees and liquidity payments, fell 5.6 percent to $287 million, NYSE said. Deutsche Boerse, based in Frankfurt, said that profit fell 26 percent as trading volume declined.

The number of derivatives traded on exchanges worldwide fell last year for the first time since 2004, according to the data. About 21 billion contracts changed hands on exchanges last year, down from 25 billion in 2011. Commodity derivatives were the only asset class that grew, the industry group said.